Long-Term Debt

9 Months Ended

Nov. 30, 2019

Note 12 - Long-Term Debt

We have a credit agreement (the “Credit Agreement”) with Bank of America, N.A., as administrative agent, and other lenders that provided for an unsecured total revolving commitment of $1.0 billion as of November 30, 2019. The commitment under the Credit Agreement terminates and the Credit Agreement matures on December 7, 2021. Borrowings accrue interest under one of two alternative methods (based upon a base rate of LIBOR) as described in the Credit Agreement. With each borrowing against our credit line, we can elect the interest rate method based on our funding needs at the time. We also incur loan commitment fees and letter of credit fees under the Credit Agreement. Outstanding letters of credit reduce the borrowing availability under the Credit Agreement on a dollar-for-dollar basis. As of November 30, 2019, the outstanding revolving loan principal balance was $225.8 million (excluding prepaid financing fees) and the face amount of outstanding letters of credit was $9.0 million. For the three and nine month periods ended November 30, 2019, borrowings under the Credit Agreement incurred interest charges at rates ranging from 2.7% to 5.3% and 2.7% to 5.5%, respectively. For the three and nine month periods ended November 30, 2018, borrowings under the Credit Agreement incurred interest charges at rates ranging from 3.1% to 5.3% and 2.8% to 5.3%, respectively. As of November 30, 2019, the amount available for borrowings under the Credit Agreement was $765.2 million. Covenants in our debt agreements limit the amount of total indebtedness we can incur. As of November 30, 2019, these covenants effectively limited our ability to incur more than $730.5 million of additional debt from all sources, including our Credit Agreement, or $765.2 million in the event a qualified acquisition is consummated.

The following table summarizes our long-term debt as of the end of the periods shown:



(in thousands)	November 30, 2019			February 28, 2019
Mississippi Business Finance Corporation Loan (the "MBFC Loan") (1)	$	20,447		$	22,335
Credit Agreement (2)	223,800			298,449
Total long-term debt	244,247			320,784
Less current maturities of long-term debt	(1,884		)	(1,884		)
Long-term debt, excluding current maturities	$	242,363		$	318,900

(1)

The MBFC Loan is unsecured and bears floating interest based on applicable LIBOR plus a margin of up to 2.0%, or a Base Rate plus a margin of up to 1.0%, as determined by the interest rate elected and the leverage ratio defined in the loan agreement. Since March 2018, the loan may be called by the holder at anytime. The loan can be prepaid without penalty. The remaining principal balance is payable as follows: $1.9 million annually on March 1, 2020 through 2022; and $14.8 million on March 1, 2023. Any remaining outstanding principal and interest is due upon maturity on March 1, 2023.


(2)	The Credit Agreement matures on December 7, 2021. The Credit Agreement's floating interest rates are hedged with interest rate swaps to effectively fix interest rates on $225 million of the outstanding principal balance under the Credit Agreement. Notes 13 and 14 to these condensed consolidated financial statements provide additional information regarding the interest rate swaps.

At November 30, 2019 and February 28, 2019, our long-term debt has floating interest rates, and its book value approximates its fair value.

All of our debt is unconditionally guaranteed, on a joint and several basis, by the Company and certain of its subsidiaries. Our debt agreements require the maintenance of certain financial covenants, including a maximum leverage ratio and a minimum interest coverage ratio (as each of these terms is defined in the agreements). Our debt agreements also contain other customary covenants. We were in compliance with the terms of these agreements as of November 30, 2019.